BI: Indonesia is Not Affected by S&P?s Downgrade

Fathan Qorib, Andin Aditya Rahman

International financial services company, Standard and Poors (S&P), downgraded its outlook on Indonesia’s credit rating from positive to stable. It will take at least 12 months before Indonesia can receive the investment grade status from S&P.

However, Perry Warjiyo, Deputy Governor of Bank Indonesia (BI), remained confident in front of the press at BI’s main building in Jakarta, Friday (3/5), by asserting that foreign investors will not be affected by S&P’s outlook.

“With strong support from the private sector, this will continue to attract both domestic and foreign businesses,” stated Perry.

During the same event, Halim Alamsyah, another Deputy Governor of BI, also asserted that Indonesia’s credit investment remains strong. This includes foreign capital investments, which currently hold 32,6 percent of government securities.

“I think that generally, long-term investors will continue to invest,” he asserted.

Regarding S&P’s recent downgrade of Indonesia’s credit rating, Halim is confident that the other two big credit rating agencies—Fitch Ratings and Moody’s Investor Service—will not follow S&P’s move.

“We already have investment grades from Fitch and Moody’s. They both still grant an investment grade,” explained Halim.

According to him, S&P’s downgrade of Indonesia’s credit rating will also not affect the domestic market and economy, which are still fundamentally strong.

“In the long run, we are certain that our economy is still strong,” Halim concluded.

(hot/jt)